Federated Hermes MDT Small Cap Growth Fund
(formerly, Federated MDT Small Cap Growth Fund)
Portfolio of Investments
October 31, 2020 (unaudited)
Shares | Value | ||
COMMON STOCKS—98.1% | |||
Communication Services—1.7% | |||
29,109 | 1,2 | Bandwidth, Inc. | $4,667,774 |
62,518 | 1 | CarGurus, Inc. | 1,245,984 |
277,749 | 1 | Cars.com, Inc. | 2,052,565 |
13,107 | Shenandoah Telecommunications Co. | 571,727 | |
17,210 | 1 | TechTarget, Inc. | 753,798 |
114,447 | 1,2 | Yelp, Inc. | 2,251,172 |
TOTAL | 11,543,020 | ||
Consumer Discretionary—14.1% | |||
79,170 | Aaron’s Holdings Company, Inc. | 4,137,424 | |
34,040 | 1 | Asbury Automotive Group, Inc. | 3,505,439 |
21,807 | Big Lots, Inc. | 1,038,013 | |
153,672 | Camping World Holdings, Inc. | 4,063,088 | |
4,954 | 1 | Cavco Industries, Inc. | 852,782 |
72,135 | 1 | Chegg, Inc. | 5,297,594 |
36,385 | 2 | Children’s Place, Inc./The | 919,449 |
16,118 | 1 | CROCs, Inc. | 843,455 |
5,577 | 1 | Deckers Outdoor Corp. | 1,413,044 |
372,934 | 1,2 | Funko, Inc. | 2,364,402 |
2,896 | 1 | Helen of Troy Ltd. | 549,082 |
38,544 | 1 | Immunovant, Inc. | 1,681,289 |
82,933 | 1 | Installed Building Products, Inc. | 7,508,754 |
44,262 | Jack in the Box, Inc. | 3,543,616 | |
2,888 | 1 | LGI Homes, Inc. | 308,669 |
37,692 | 1,2 | Lovesac Co./The | 970,192 |
7,775 | 1 | Meritage Corp. | 677,125 |
41,624 | Murphy USA, Inc. | 5,090,199 | |
17,254 | 1 | National Vision Holdings, Inc. | 695,854 |
43,198 | Papa Johns International, Inc. | 3,308,967 | |
161,350 | 1 | Perdoceo Education Corp. | 1,821,641 |
21,588 | 1 | Purple Innovation, Inc. | 612,452 |
121,782 | Rent-A-Center, Inc. | 3,763,064 | |
6,578 | 1 | RH | 2,205,143 |
53,530 | Shutterstock, Inc. | 3,503,538 | |
3,428 | 1 | Sleep Number Corp. | 217,198 |
145,090 | 1 | Sportsman’s Warehouse Holdings, Inc. | 1,889,072 |
339,211 | Steven Madden Ltd. | 8,144,456 | |
23,736 | 1 | TopBuild Corp. | 3,636,593 |
65,376 | Wingstop, Inc. | 7,605,190 | |
163,947 | 1 | WW International, Inc. | 3,469,118 |
15,970 | 1 | XPEL, Inc. | 395,737 |
239,259 | 1 | YETI Holdings, Inc. | 11,838,535 |
TOTAL | 97,870,174 | ||
Consumer Staples—3.8% | |||
131,208 | 2 | B&G Foods, Inc., Class A | 3,484,884 |
293,986 | 1 | BJ’s Wholesale Club Holdings, Inc. | 11,256,724 |
127,252 | 1 | elf Beauty, Inc. | 2,579,398 |
1
Shares | Value | ||
COMMON STOCKS—continued | |||
Consumer Staples—continued | |||
46,469 | 1 | Freshpet, Inc. | $5,320,701 |
101,918 | Inter Parfums, Inc. | 4,184,753 | |
TOTAL | 26,826,460 | ||
Energy—0.4% | |||
141,351 | 1 | CONSOL Energy, Inc. | 535,720 |
131,971 | 1 | Magnolia Oil & Gas Corp. | 572,754 |
357,080 | 1 | Propetro Holding Corp. | 1,410,466 |
TOTAL | 2,518,940 | ||
Financials—5.3% | |||
173,501 | Artisan Partners Asset Management, Inc. | 6,950,450 | |
103,110 | Brightsphere Investment Group, Inc. | 1,422,918 | |
56,162 | 1 | BRP Group, Inc. | 1,432,131 |
24,541 | CNB Financial Corp. | 445,174 | |
8,813 | Cowen Group, Inc. | 189,127 | |
20,928 | 1 | Focus Financial Partners, Inc. | 764,081 |
23,622 | 1 | Goosehead Insurance, Inc. | 2,894,640 |
47,944 | 1 | Green Dot Corp. | 2,556,374 |
33,350 | Guaranty Bancshares, Inc. | 963,815 | |
34,086 | Kinsale Capital Group, Inc. | 6,390,102 | |
38,233 | Pennymac Financial Services, Inc. | 1,943,001 | |
143,347 | Selective Insurance Group, Inc. | 7,462,645 | |
51,679 | State Auto Financial Corp. | 637,719 | |
30,312 | 1 | Trupanion, Inc. | 2,168,521 |
10,143 | Universal Insurance Holdings, Inc. | 126,483 | |
3,200 | 1,2 | World Acceptance Corp. | 268,768 |
TOTAL | 36,615,949 | ||
Health Care—33.3% | |||
3,282 | 1 | Acceleron Pharma, Inc. | 343,232 |
114,091 | 1,2 | Acer Therapeutics, Inc. | 278,382 |
51,904 | 3 | Adeptus Health, Inc., Class A | 0 |
31,092 | 1 | Akero Therapeutics, Inc. | 825,493 |
135,728 | 1 | Amicus Therapeutics, Inc. | 2,420,030 |
76,991 | 1 | Amneal Pharmaceuticals, Inc | 320,283 |
33,798 | 1 | Amphastar Pharmaceuticals, Inc. | 662,103 |
248,383 | 1 | AnaptysBio, Inc. | 7,317,363 |
157,429 | 1 | ANI Pharmaceuticals, Inc. | 4,012,865 |
25,595 | 1,2 | Arcus Biosciences, Inc. | 557,971 |
66,088 | 1,2 | Axonics Modulation Technologies, Inc. | 3,098,866 |
36,206 | 1,2 | Beam Therapeutics, Inc. | 1,237,159 |
15,246 | 1 | Bellerophon Therapeutics, Inc. | 128,524 |
57,482 | 1 | Biohaven Pharmaceutical Holding Co. Ltd. | 4,452,556 |
42,380 | 1 | Blueprint Medicines Corp. | 4,334,626 |
80,364 | 1 | Castle Biosciences, Inc. | 3,731,300 |
373,362 | 1 | Catalyst Pharmaceutical Partners, Inc. | 1,108,885 |
26,292 | 1 | ChemoCentryx, Inc. | 1,262,016 |
15,885 | 1,2 | Collegium Pharmaceutical, Inc. | 283,230 |
27,632 | 1 | Corcept Therapeutics, Inc. | 463,665 |
281,779 | 1 | Cross Country Healthcare, Inc. | 2,211,965 |
209,142 | 1 | Cytomx Therapeutics, Inc. | 1,384,520 |
90,024 | 1 | Denali Therapeutics, Inc. | 3,851,227 |
56,416 | 1 | Dicerna Pharmaceuticals, Inc. | 1,184,172 |
55,359 | 1 | Eagle Pharmaceuticals, Inc. | 2,575,301 |
2
Shares | Value | ||
COMMON STOCKS—continued | |||
Health Care—continued | |||
45,693 | 1 | Emergent BioSolutions, Inc. | $4,110,999 |
60,214 | 1,2 | Enanta Pharmaceuticals, Inc. | 2,627,137 |
43,091 | Ensign Group, Inc. | 2,535,474 | |
67,292 | 1 | Fate Therapeutics, Inc. | 2,987,765 |
38,714 | 1 | FibroGen, Inc. | 1,485,843 |
259,933 | 1,2 | G1 Therapeutics, Inc. | 2,856,664 |
41,843 | 1 | Globus Medical, Inc. | 2,180,857 |
369,402 | 1 | GlycoMimetics, Inc. | 1,034,326 |
59,598 | 1 | Gossamer Bio, Inc. | 494,663 |
210,816 | 1 | Halozyme Therapeutics, Inc. | 5,902,848 |
96,124 | 1,2 | Inogen, Inc. | 2,807,782 |
219,545 | 1 | Inovalon Holdings, Inc. | 4,169,160 |
71,147 | 1 | Inspire Medical Systems, Inc. | 8,497,086 |
75,467 | 1,2 | Intellia Therapeutics, Inc. | 1,806,680 |
18,915 | 1 | iRhythm Technologies, Inc. | 3,999,577 |
316,943 | 1 | Ironwood Pharmaceuticals, Inc. | 3,131,397 |
24,321 | Issuer Unassigned | 385,245 | |
9,570 | 1,2 | Karuna Therapeutics, Inc. | 776,988 |
125,106 | 1 | Kiniksa Pharmaceuticals Ltd. | 1,959,160 |
38,217 | 1 | Kodiak Sciences, Inc. | 3,470,486 |
154,940 | 1 | Kura Oncology, Inc. | 4,841,875 |
96,760 | LeMaitre Vascular, Inc. | 3,142,765 | |
1,066,432 | 1,2 | Lexicon Pharmaceuticals, Inc. | 1,183,739 |
18,302 | 1 | Ligand Pharmaceuticals, Inc., Class B | 1,509,000 |
63,027 | 1 | Medpace Holdings, Inc. | 6,992,215 |
35,101 | 1 | Mirati Therapeutics, Inc. | 7,621,831 |
19,912 | 1 | Myokardia, Inc. | 4,450,929 |
280,694 | 1 | Myriad Genetics, Inc. | 3,489,026 |
60,945 | 1 | Natera, Inc. | 4,099,161 |
44,411 | 1 | NextCure, Inc. | 429,010 |
42,419 | 1 | NextGen Healthcare, Inc. | 576,898 |
69,328 | 1 | Omnicell, Inc. | 6,000,338 |
34,780 | 1 | Orthofix Medical, Inc. | 1,087,223 |
241,788 | 1 | Pacific Biosciences of California, Inc. | 3,169,841 |
105,945 | 1 | Pacira BioSciences, Inc. | 5,540,923 |
5,771 | 1 | Pennant Group, Inc./The | 240,420 |
134,362 | 1 | Personalis, Inc. | 3,322,772 |
63,513 | 1,2 | Prevail Therapeutics, Inc. | 621,792 |
260,669 | 1 | Puma Biotechnology, Inc. | 2,181,800 |
61,673 | 1 | R1 RCM, Inc. | 1,105,180 |
158,800 | 1 | Recro Pharma, Inc. | 252,492 |
6,876 | 1 | Repligen Corp. | 1,145,335 |
10,349 | 1 | Replimune Group, Inc. | 432,692 |
104,418 | 1,2 | Rocket Pharmaceuticals, Inc. | 2,917,439 |
350,415 | 1,2 | Savara, Inc. | 364,432 |
51,665 | 1,2 | Scholar Rock Holding Corp. | 2,009,768 |
179,615 | 1 | Select Medical Holdings Corp. | 3,768,323 |
42,105 | 1 | Seres Therapeutics, Inc. | 1,174,308 |
131,347 | 1 | Shockwave Medical, Inc. | 8,973,627 |
55,206 | 1 | SI-BONE, Inc. | 1,157,670 |
133,545 | 1 | Silk Road Medical, Inc. | 8,092,827 |
4,204 | 2 | Simulations Plus, Inc. | 272,503 |
3
Shares | Value | ||
COMMON STOCKS—continued | |||
Health Care—continued | |||
112,828 | 1 | Supernus Pharmaceuticals, Inc. | $2,071,522 |
45,301 | 1 | Surgery Partners, Inc. | 988,468 |
15,194 | 1 | Syneos Health, Inc. | 806,498 |
8,999 | 1 | Tandem Diabetes Care, Inc. | 980,891 |
7,870 | 1 | TCR2 Therapeutics, Inc. | 154,803 |
54,634 | 1 | Turning Point Therapeutics, Inc. | 5,036,708 |
30,873 | 1 | Twist Bioscience Corp. | 2,366,107 |
32,559 | 1 | U.S. Physical Therapy, Inc. | 2,582,905 |
57,782 | 1,2 | Ultragenyx Pharmaceutical, Inc. | 5,807,091 |
207,043 | 1 | Vanda Pharmaceuticals, Inc. | 2,213,290 |
90,000 | 1,2 | VBI Vaccines, Inc. | 211,500 |
40,787 | 1 | Vocera Communications, Inc. | 1,336,998 |
121,528 | 1 | Voyager Therapeutics, Inc. | 1,291,843 |
128,369 | 1 | Xencor, Inc. | 4,926,802 |
106,306 | 1,2 | Zogenix, Inc. | 2,266,444 |
67,781 | 1,2 | Zynex, Inc. | 868,275 |
TOTAL | 231,344,170 | ||
Industrials—12.1% | |||
114,844 | Advanced Drainage System, Inc. | 7,284,555 | |
127,434 | 1,2 | Aerojet Rocketdyne Holdings, Inc. | 4,131,410 |
20,649 | 1 | Aerovironment, Inc. | 1,576,758 |
157,475 | Albany International Corp., Class A | 8,021,777 | |
245,198 | Apogee Enterprises, Inc. | 5,857,780 | |
278,462 | 1 | Astronics Corp. | 1,782,157 |
107,741 | 1 | Atlas Air Worldwide Holdings, Inc. | 6,373,958 |
14,765 | AZZ, Inc. | 495,956 | |
155,671 | 1 | Builders Firstsource, Inc. | 4,716,831 |
14,053 | 1 | Cimpress PLC | 1,031,490 |
163,237 | 1 | Echo Global Logistics, Inc. | 4,402,502 |
71,233 | Exponent, Inc. | 4,957,105 | |
23,670 | Federal Signal Corp. | 678,856 | |
155,615 | 1 | Foundation Building Materials, Inc. | 2,265,754 |
104,346 | 1 | Franklin Covey Co. | 1,765,534 |
162,711 | 1 | GMS, Inc. | 3,677,269 |
113,267 | Heidrick & Struggles International, Inc. | 2,588,151 | |
79,406 | Helios Technologies, Inc. | 3,322,347 | |
253,186 | 1 | Mistras Group, Inc. | 941,852 |
510,043 | 1 | MRC Global, Inc. | 2,172,783 |
76,770 | 1 | PGT, Inc. | 1,272,847 |
127,177 | 1,2 | Plug Power, Inc. | 1,780,478 |
61,118 | REV Group, Inc. | 479,776 | |
69,009 | 1 | Siteone Landscape Supply, Inc. | 8,245,885 |
23,830 | 1 | SPX Corp. | 1,010,154 |
11,065 | Tennant Co. | 659,695 | |
197,470 | 1 | Thermon Group Holdings, Inc. | 1,992,472 |
86,177 | Triumph Group, Inc. | 568,768 | |
TOTAL | 84,054,900 | ||
Information Technology—21.1% | |||
44,606 | Amkor Technology, Inc. | 528,581 | |
150,991 | 1 | Avaya Holdings Corp. | 2,597,045 |
115,075 | 1 | Axcelis Technologies, Inc. | 2,539,705 |
152,348 | Blackbaud, Inc. | 7,516,850 |
4
Shares | Value | ||
COMMON STOCKS—continued | |||
Information Technology—continued | |||
172,851 | 1 | Box, Inc. | $2,679,191 |
18,412 | 1 | Calix, Inc. | 431,025 |
150,254 | 1 | ChannelAdvisor Corp. | 2,434,115 |
166,412 | 1,2 | Coda Octopus Group, Inc. | 918,594 |
144,985 | 1 | Commvault Systems, Inc. | 5,739,956 |
8,145 | 1 | Digital Turbine, Inc. | 233,436 |
91,517 | 1 | Domo, Inc. | 2,907,495 |
174,824 | 1 | Endurance International Group Holdings, Inc. | 1,015,728 |
39,357 | 1 | Envestnet, Inc. | 3,020,256 |
197,254 | Evertec, Inc. | 6,564,613 | |
31,861 | 1 | Evo Payments, Inc. | 671,311 |
56,461 | 1 | Five9, Inc. | 8,566,263 |
217,982 | 1 | FormFactor, Inc. | 6,179,790 |
47,549 | 1 | Inphi Corp. | 6,645,448 |
77,841 | 1,2 | Intelligent Systems Corp. | 2,951,731 |
145,800 | 1 | MA-COM Technology Solutions Holdings, Inc. | 5,321,700 |
75,214 | 1 | MaxLinear, Inc. | 1,988,658 |
175,020 | 1 | Model N, Inc. | 6,165,955 |
34,599 | 1 | OSI Systems, Inc. | 2,669,659 |
70,514 | Perspecta, Inc. | 1,264,316 | |
161,237 | 1,2 | Plantronics, Inc. | 3,147,346 |
89,062 | 1,2 | Qualys, Inc. | 7,824,097 |
236,014 | 1 | SailPoint Technologies Holding | 9,796,941 |
168,906 | 1 | Secureworks Corp. | 1,756,622 |
55,322 | 1 | Semtech Corp. | 3,036,625 |
54,273 | 1 | Sitime Corp. | 4,531,253 |
42,246 | 1 | Sprout Social, Inc. | 1,846,150 |
131,175 | 1 | SPS Commerce, Inc. | 11,227,268 |
112,622 | 1 | SVMK, Inc. | 2,357,179 |
25,799 | 1 | Synaptics, Inc. | 1,978,009 |
101,548 | 1 | Tenable Holdings, Inc. | 3,463,802 |
76,525 | TTEC Holdings, Inc. | 4,192,040 | |
46,148 | 1 | Varonis Systems, Inc. | 5,333,324 |
81,936 | 1 | Workiva, Inc. | 4,531,880 |
TOTAL | 146,573,957 | ||
Materials—2.2% | |||
110,275 | Boise Cascade Co. | 4,232,355 | |
22,937 | Compass Minerals International, Inc. | 1,384,936 | |
61,372 | Fuller (H.B.) Co. | 2,777,083 | |
132,089 | 1 | Koppers Holdings, Inc. | 2,962,756 |
241,569 | Myers Industries, Inc. | 3,464,100 | |
86,100 | 3 | Rentech, Inc. | 0 |
103,128 | 1 | Ryerson Holding Corp. | 811,617 |
TOTAL | 15,632,847 | ||
Real Estate—3.5% | |||
54,010 | 1 | eXp World Holdings, Inc. | 2,289,484 |
75,276 | LTC Properties, Inc. | 2,484,861 | |
127,614 | 2 | QTS Realty Trust, Inc. | 7,849,537 |
121,438 | 1 | Redfin Corp. | 5,072,465 |
248,369 | RMR Group, Inc./The | 6,621,518 | |
TOTAL | 24,317,865 |
5
Shares | Value | ||
COMMON STOCKS—continued | |||
Utilities—0.6% | |||
12,552 | American States Water Co. | $937,509 | |
8,858 | 2 | California Water Service Group | 394,801 |
16,759 | Chesapeake Utilities Corp. | 1,629,142 | |
36,698 | Clearway Energy, Inc. | 961,855 | |
5,944 | Middlesex Water Co. | 381,248 | |
TOTAL | 4,304,555 | ||
TOTAL COMMON STOCKS (IDENTIFIED COST $603,587,947) | 681,602,837 | ||
INVESTMENT COMPANIES—7.0% | |||
20,434,113 | Federated Hermes Government Obligations Fund, Premier Shares, 0.03%4 | 20,434,113 | |
28,443,280 | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares, 0.10%4 | 28,454,657 | |
TOTAL INVESTMENT COMPANIES (IDENTIFIED COST $48,888,770) | 48,888,770 | ||
TOTAL INVESTMENT IN SECURITIES—105.1% (IDENTIFIED COST $652,476,717) | 730,491,607 | ||
OTHER ASSETS AND LIABILITIES - NET—(5.1)%5 | (35,578,367) | ||
TOTAL NET ASSETS—100% | $694,913,240 |
6
An affiliated company is a company in which the Fund, alone or in combination with other funds, has ownership of at least 5% of the voting shares. Transactions with affiliated companies during the year ended October 31, 2020, were as follows:
Value as of 7/31/2020 | Purchases at Cost* | Proceeds from Sales* | |
Consumer Discretionary: | |||
Wingstop, Inc. | $19,605,937 | $— | $(9,054,149) |
Health Care: | |||
Amphastar Pharmaceuticals, Inc. | $— | $686,809 | $— |
AnaptysBio, Inc. | $5,832,007 | $— | $(2,011,155) |
Ultragenyx Pharmaceutical, Inc. | $4,484,899 | $512,973 | $(428,776) |
Affiliated Issuers no longer in the portfolio at period end | $1,384,351 | $200,911 | $(1,393,043) |
TOTAL OF AFFILIATED COMPANIES TRANSACTIONS | $31,307,194 | $1,400,693 | $(12,887,123) |
Change in Unrealized Appreciation/ Depreciation | Net Realized Gain/ (Loss)* | Value as of 10/31/2020 | Shares Held as of 10/31/2020 | Dividend Income* |
$(6,605,982) | $3,659,384 | $7,605,190 | 65,376 | $12,596 |
$(24,706) | $— | $662,103 | 33,798 | $— |
$2,982,625 | $513,886 | $7,317,363 | 248,383 | $— |
$1,288,574 | $(50,579) | $5,807,091 | 57,782 | $— |
$25,553 | $(217,772) | $— | — | $— |
$(2,333,936) | $3,904,919 | $21,391,747 | 405,339 | $12,596 |
* | A portion of the amount shown was recorded when the Fund no longer had ownership of at least 5% of the voting shares. |
Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with the affiliated fund holdings during the period ended October 31, 2020, were as follows:
Federated Hermes Government Obligations Fund, Premier Shares* | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares | Total of Affiliated Transactions | |
Value as of 7/31/2020 | $35,185,159 | $62,871,883 | $98,057,042 |
Purchases at Cost | $45,295,565 | $65,615,477 | $110,911,042 |
Proceeds from Sales | $(60,046,611) | $(100,031,195) | $(160,077,806) |
Change in Unrealized Appreciation/Depreciation | N/A | $— | $— |
Net Realized Gain/(Loss) | N/A | $(1,508) | $(1,508) |
Value as of 10/31/2020 | $20,434,113 | $28,454,657 | $48,888,770 |
Shares Held as of 10/31/2020 | 20,434,113 | 28,443,280 | 48,877,393 |
Dividend Income | $0 | $3,911 | $3,911 |
* | All or a portion of the balance/activity for the fund relates to cash collateral received on securities lending transactions. |
1 | Non-income-producing security. |
2 | All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers.As of October 31, 2020, securities subject to this type of arrangement and related collateral were as follows: |
Market Value of Securities Loaned | Collateral Received |
$36,443,807 | $38,423,113 |
3 | Market quotations and price evaluations are not available. Fair value determined using significant unobservable inputs in accordance with procedures established by and under the general supervision of the Fund’s Board of Trustees (the “Trustees”). |
4 | 7-day net yield. |
5 | Assets, other than investments in securities, less liabilities. |
Note: The categories of investments are shown as a percentage of total net assets at October 31, 2020.
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
■ Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■ Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs.
■ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■ Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
■ Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■ For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered, such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer’s financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securi
ties or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value obtained could be materially different.
Fair Valuation Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services’ policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services, and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used, as of October 31, 2020, in valuing the Fund’s assets carried at fair value:
Valuation Inputs | ||||
Level 1— Quoted Prices | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Equity Securities: | ||||
Common Stocks | ||||
Domestic | $673,399,049 | $— | $0 | $673,399,049 |
International | 8,203,788 | — | — | 8,203,788 |
Investment Companies | 48,888,770 | — | — | 48,888,770 |
TOTAL SECURITIES | $730,491,607 | $— | $0 | $730,491,607 |